Correlation Between Cisco Systems and Unisys Corp

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Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Unisys Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cisco Systems and Unisys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Unisys Corp, you can compare the effects of market volatilities on Cisco Systems and Unisys Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cisco Systems with a short position of Unisys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Unisys Corp.

Diversification Opportunities for Cisco Systems and Unisys Corp

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Cisco and Unisys is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Unisys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys Corp and Cisco Systems is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cisco Systems are associated (or correlated) with Unisys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys Corp has no effect on the direction of Cisco Systems i.e., Cisco Systems and Unisys Corp go up and down completely randomly.

Pair Corralation between Cisco Systems and Unisys Corp

Given the investment horizon of 90 days Cisco Systems is expected to generate 23.29 times less return on investment than Unisys Corp. But when comparing it to its historical volatility, Cisco Systems is 1.75 times less risky than Unisys Corp. It trades about 0.0 of its potential returns per unit of risk. Unisys Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,118  in Unisys Corp on April 6, 2022 and sell it today you would earn a total of  154.00  from holding Unisys Corp or generate 13.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Cisco Systems  vs.  Unisys Corp

 Performance (%) 
      Timeline 
Cisco Systems 
Cisco Performance
0 of 100
Over the last 90 days Cisco Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0357
Payout Ratio
0.45
Last Split Factor
2:1
Forward Annual Dividend Rate
1.52
Dividend Date
2022-07-27
Ex Dividend Date
2022-07-05
Last Split Date
2000-03-23

Cisco Price Channel

Unisys Corp 
Unisys Performance
0 of 100
Over the last 90 days Unisys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Last Split Factor
1:10
Ex Dividend Date
1990-06-18
Last Split Date
2009-10-26

Unisys Price Channel

Cisco Systems and Unisys Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cisco Systems and Unisys Corp

The main advantage of trading using opposite Cisco Systems and Unisys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Unisys Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Unisys Corp will offset losses from the drop in Unisys Corp's long position.

Cisco Systems

Pair trading matchups for Cisco Systems

The idea behind Cisco Systems and Unisys Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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